An airline can be defined as a company that offers regular services for transporting passengers or goods via the air. These companies are said to make up the airline industry, which is also regarded as a sub-sector of the aviation sector and the wider travel industry. In this post, you will learn everything you need to know about airlines.
- What is the Airline Industry?
- What is the Difference Between the Airline Industry and the Aviation Industry?
- What are the Different Types of Airlines?
- The 7 Biggest Airline Companies in the World
- The 4 Most Important Business Models for Airlines
- The Importance of Revenue Management Within the Airline Industry
- Popular Websites to Book Airline Tickets
- List of Platforms to Increase Bookings in the Travel Industry
- What Will Change the Airline Industry in Upcoming Years?
- Travel Marketing Tips to Gain More Customers
- The Latest Technology Trends Within Travel
- The Latest Travel Trends
- The Value of Travel Software Packages
- Other Related Industries
What is the Airline Industry?
The airline industry encompasses a wide range of businesses, called airlines, which offer air transport services for paying customers or business partners. These air transport services are provided for both human travellers and cargo, and are most commonly offered via jets, although some airlines also use helicopters.
Airlines may offer scheduled and/or chartered services and the airline industry forms a key part of the wider travel industry, providing customers with the ability to purchase seats on flights and travel to different parts of the world. The airline industry offers a variety of career paths, including pilots, flight attendants and ground crew.
The terms ‘airline industry’ and ‘aviation industry’ are sometimes thought of as being synonymous, but in reality they have different meanings. As stated, the airline industry refers to companies that offer air transport services to paying customers, whereas the aviation industry includes all aviation-related businesses.
With this in mind, the airline industry can be classed as just one sector of the wider aviation industry. In addition to this sector, aviation companies would also include businesses like aircraft manufacturers, companies offering non-commercial flights, aerospace companies, regulation authorities and those involved with research.
What are the Different Types of Airlines?
Airlines are often grouped into different categories and precise definitions can vary in different parts of the world. However, broadly speaking, airlines can be separated into three main types, which are as follows:
International airlines are a group of the largest, most high-profile and most successful airlines. They make billions in revenue each year and operate large passenger jets. These airlines also tend to focus their efforts on offering global services, carrying passengers and cargo over large distances.
Additionally, international airlines usually employ tens of thousands of people, often have multiple hubs and will provide access to hundreds of destinations. Examples would include Delta Air Lines and American Airlines.
National airlines represent the next step down from the largest international airlines. They will typically offer both medium-sized and large-sized jets and will often focus on offering services to areas within their home country, but many will offer access to international destinations too.
A national airline is still likely to employ thousands of people, but will have a smaller fleet size. In many cases, the destinations they offer flights to are influenced by seasonal fluctuations in demand.
Finally, as the name suggests, regional airlines are the smallest of the three main types and focus on offering services within specific regions. In many cases, they provide passenger services to parts of the world with lower levels of demand and where services are not offered by either national or international airlines.
Some regional airlines also function as an affiliate for a national or international airline. Within this context, they will typically provide connection flights from the region they cover to the airline’s main hubs.
When it comes to identifying the largest airlines in the world, one of the most widely utilised metrics is revenue passenger-kilometres (RPKs) and this information is published each year by the International Air Transport Association (IATA). As the name indicates, this metric is the sum total of the distances flown by each of the airline’s paying passengers over the course of a year. With this in mind, the seven biggest airline companies in the world today are:
The biggest airline company in the airline industry is American Airlines. Founded in 1926, American Airlines is the largest airline in the world, not only according to the aforementioned RPK metric, but also based on fleet size, total passengers and number of destinations served. The company has its main headquarters in Fort Worth, Texas, flies to around 350 destinations, and handles 200 million annual passengers.
American Airlines’ largest hub is Dallas/Fort Worth International Airport, with more than 50 million passengers being served via this hub alone each year. The business also employs more than 100,000 people.
The second largest airline company in the airline industry is Delta Airlines. Based in Atlanta, Georgia, in the USA, Delta Air Lines was established in 1925 and commenced passenger operations in 1929. The company, which employs more than 80,000 people, operates in excess of 5,000 daily flights, covers more than 300 destinations and handles in the region of 200 million passengers each year.
In total, Delta Air Lines has nine hubs, including Atlanta Airport, New York-JFK and Detroit Metropolitan Airport. It is also the second largest airline in the world by fleet size, with more than 900 aircraft.
The third largest airline company in the airline industry is United Airlines. United Airlines was founded in 1926 and started offering passenger services in 1931. The company is based in Chicago, Illinois and offers flights to more than 300 destinations. United Airlines is ranked as the third largest airline, not only by RPK, but also by fleet size, with more than 750 Boeing or Airbus aircraft.
In total, the airline has eight hubs, with Chicago–O’Hare Airport serving as the main one. United Airlines serves more than 150 million passengers each year and is also a key member of the Star Alliance.
Another main airline company within the airline industry is Emirates, based in Dubai, in the United Arab Emirates. A state-owned airline, it started operations in 1985 and is also recognised as one of the largest airlines in the world for cargo activities. Emirates currently has a fleet size of more than 250 aircraft and is notable for not having joined any of the major airline alliances.
It is estimated that Emirates provides flights for more than 50 million annual passengers and offers services to more than 150 destinations in total. The company’s sole hub is Dubai International Airport.
The fifth biggest airline company in the airline industry is Southwest Airlines. Established in 1967 and commencing with passenger airline services in 1971, Southwest Airlines is recognised as the largest low-cost carrier in the world, according to most metrics. It has more than 60,000 staff, operates with a fleet of more than 750 aircraft and carries more domestic passengers than any other US airline.
Unlike most of the other airlines on this list, Southwest Airlines does not have a main hub and instead relies on a point-to-point system. Most of its destinations are in North America and Central America.
The sixth biggest airline company in the airline industry is China Southern Airlines. China Southern Airlines was founded in 1988 and is the largest airline in Asia by fleet size, delivering its services through more than 600 aircraft. The company provides services to in excess of 200 destinations, carries around 150 million passengers each year and employs somewhere in the region of 100,000 staff.
The airline’s two main hubs are Beijing Capital International Airport and Guangzhou Baiyun International Airport.
One more large airline company within the airline industry is Ryanair. Ryanair is Founded in 1984, Ryanair is based in Dublin, Ireland and is recognised as one of the largest budget airlines in the world, providing flights for more than 100 million passengers every year. These flights cover 225 destinations and the company has a fleet size of more than 300 aircraft.
The airline makes use of a point-to-point model, rather than having a central hub, but its main operational bases can be found at Dublin Airport and London Stanstead Airport. Its route network centres on Europe and the Middle East.
The 4 Most Important Business Models for Airlines
There are a huge number of airlines around the world, each with different ways of doing business. Nevertheless, most can be categorised as belonging to one of the four main business models, which are as follows:
Full-service carriers are airlines that operate with a business model that includes offering a range of pre-flight and on-board services with the price of the ticket. This may include, for instance, checked baggage, in-flight meals and multiple service classes, such as first-class, business class, economy class, etc.
Their operations will typically include both passenger and cargo services, and frequent flyer programmes are often on offer. In many parts of the world, full-service carriers are former state-owned ﬂag carriers, which have since been privatised. They usually offer domestic, international, long haul and short haul slights.
Examples would include: British Airways, American Airlines, Air France and Lufthansa.
Low-cost carriers are airlines that aim to gain a competitive advantage over full-service carriers by reducing costs. This is done in a number of ways, including using smaller fleets and smaller aircraft, and also by offering more limited services. Their business model tends to centre around promoting value for money.
For travellers, flights from low-cost carriers are often significantly cheaper. However, they tend not to offer lounge services at airports and things like in-flight meals and baggage allowances will almost certainly not be included in the price of the ticket. Instead, where they are available, customers pay for them separately.
Examples would include: Ryanair, Southwest Airlines, easyJet and Eurowings.
Also known as holiday carriers, charter airlines are focused very firmly on providing passenger services to tourists. In most cases, however, they do not sell airline tickets directly. Instead, they will enter into agreements with tour operators and/or travel agencies, who then take responsibility for finding passengers for them.
In terms of passenger services, charter airlines are often a “middle-ground” between full-service and low-cost carriers. As with low-cost airlines, the business model does rely on reducing overall costs. Yet, in many cases, in-flight meals and similar services will be included with the price of an airline ticket.
Finally, cargo airlines, also known as airfreight carriers, are airlines that are either solely or primarily focused on the air transportation of cargo or freight. Some cargo airlines, such as Lufthansa Cargo and Emirates SkyCargo, are subsidiaries or sub-divisions of airlines that also offer passenger services.
Cargo airlines can be further broken down into traditional cargo carriers and integrated cargo carriers. With the latter, all aspects of cargo transportation are controlled by the company, including the ground or non-flight elements. Examples of airlines that would fit into the integrated cargo carrier category include UPS Airlines and FedEx Express.
The aim with any revenue management strategy is to sell the right product or service to the right customer, in the right moment, via the right distribution channel, for the right price. This is applicable to the airline industry too, with companies tracking and analysing the behaviour of passengers, in order to anticipate demand.
Once levels of demand can be predicted, airlines can then focus on optimising availability and adjusting pricing. For instance, an airline can charge higher prices at times of high demand, but may charge lower prices at a time when demand is low, in an effort to fill seats that might otherwise be left vacant.
Adopting a revenue management strategy can, therefore, help airlines to increase both revenue and profits. You can learn much more about revenue management by reading our article: “Revenue Management; Clearly Explained!”
Popular Websites to Book Airline Tickets
Today, customers have a range of options for actually booking airline tickets, with online purchases being one of the most common. Some of the most popular websites used for this purpose are outlined below:
The first option for customers looking to book airline tickets is to do so directly through an airline website. This is the most important distribution channel for airlines, because unlike with bookings made through online travel agents or metasearch engines, they do not have to pay a commission fee on the booking. For customers, airline websites may offer exclusive deals or flights that cannot be found on other platforms, and many offer price match guarantees.
Launched in 2002 and based in Edinburgh, Scotland, Skyscanner is a metasearch engine owned by the Chinese Trip.com Group. The platform allows customers to easily search for flights to and from their chosen destination and will compare prices from different online travel agents, making it easier to find the best possible deal. In addition to booking flights, customers can also book other travel products, such as hotel rooms and rental cars.
Click here for more information about Skyscanner.
Kayak was founded in 2004 and is now owned by Booking Holdings, which is the parent company of Booking.com. The service is available in 30 countries and more than 15 languages, and functions as a metasearch engine, finding flight deals from airline websites, as well as online travel agents. Kayak allows customers to track prices over time and set up price alerts, while it also offers data-driven advice on whether to book now or wait for prices to fall.
Click here for more information about Kayak.
Owned by Expedia Group, which is the parent company of Expedia, Travelocity launched in 1996 and was an innovator within the field of online travel agents, allowing customers to purchase tickets from the hotel and airline industry without needing to deal with a human agent. The platform connects with major global distribution systems, in order to access up-to-date information about the availability and prices of flights and other travel products.
Click here for more information about Travelocity.
Expedia.com is the main online travel agency website owned and operated by Expedia Group. The platform, which doubles as a metasearch engine, launched in 2001 and is based in Bellevue, Washington, USA. Expedia connects with some of the major global distribution systems, in order to provide information about pricing and availability of airline tickets. It functions in a similar way to Travelocity, but offers some additional features, such as flexible date searching.
Click here for more information about Expedia.
The main online travel agency service owned by Booking Holdings, Booking.com was founded in 1996, making it one of the oldest OTAs still in existence. The platform is available in a total of 48 languages and the business itself is based in Amsterdam, in the Netherlands. Booking.com offers flights, accommodation, package deals, car rentals and other travel services. Products from the airline industry are sold using GDS systems like Sabre and Amadeus.
Click here for more information about Booking.com.
Founded in 2005, CheapOair is based in New York City, USA and functions as an OTA service, allowing customers to purchase travel products, including airline tickets. Bookings can be made on a self-service basis, using the website or mobile apps, or made over the phone, speaking to a human travel agent. As the name indicates, the service was primarily designed with the airline industry in mind. The company is owned by Fareportal, who also own OneTravel.
Click here for more information about CheapOair.
Based in Needham, Massachusetts, USA, TripAdvisor was launched in 2000 and was originally designed as a dedicated online reviews platform. While it still functions as such and still relies heavily on user-generated content, it has since expanded into a fully-fledged travel industry metasearch engine too. As a result, customers can use the service to find and compare the prices of a range of travel products, including those offered by companies in the airline industry.
Click here for more information about Tripadvisor.
Launched in 1998, with its HQ in New York City, Travelzoo is a travel website with a focus on the North America, Europe, and Asia Pacific markets. It is technically neither an OTA or a metasearch engine and instead publishes deals and special offers from more than 2,000 travel, entertainment and local businesses, including those in the airline industry. Companies pay to have their deal advertised on the platform, but all deals need to be approved first.
Click here for more information about Travelzoo.
Momondo is based in Copenhagen, Denmark and launched in 2006. The platform, which is owned by Booking Holdings, is a metasearch engine and is available in 18 languages. Customers are able to compare the prices of airline tickets and follow links through to other websites in order to actually them. The service is free to use and the metasearch engine explores several smaller OTAs, at times offering deals that are not seen on most other platforms.
Click here for more information about Momondo.
Travel companies within the airline industry and other related industries need to optimise distribution and marketing, so they reach as many customers as possible and maximise demand for bookings. Travel agencies can be invaluable in this regard, because they often serve as a convenient one-stop shop for customers who may not be willing to take the time to book with individual companies.
In “Travel Agency: List of Platforms to Increase Bookings” you will find a comprehensive list of different travel agency platforms you can connect with, organised according to their areas of specialisation.
What Will Change the Airline Industry in Upcoming Years?
Travel marketing is one of the key ways that companies operating in the airline industry can communicate with customers, promote their services, convey brand values and differentiate themselves from competitors. However, it is also important to understand that travel marketing can take many forms.
In the article “Travel Marketing: The Latest Marketing Tips to Boost Your Results!” you will be able to learn more about some of the most popular and successful marketing strategies those in the airline industry can use.
For businesses in the airline industry, technology is a key driver of success, helping to distribute products, promote services and improve overall efficiency. Of course, it is also crucial for customers too, whether it is a single tourist looking for flights, or a travel management company arranging business travel for multiple clients.
Through our “Key Technology Trends Emerging in the Travel Industry” article, you will be able to find out more about the very latest technology, how it is disrupting the industry, and how it can help travel companies.
New technology, changing demographics and alterations to customer behaviour mean that companies in the airline industry and wider travel industry need to stay on top of the latest trends. After all, companies that fail to adapt to new ways of doing business risk being left behind when it comes to financial results too.
In our article “Travel Trends: Opportunities for the Travel Industry”, you will be able to find out more about the latest trends, along with ways that airlines and other businesses can use them to their advantage.
Increasingly, the best travel companies are recognising the value of software for improving efficiency and accuracy. From revenue management software helping to optimise financial results, through to marketing, distribution and reputation management solutions, these packages can make a significant difference to overall business results.
The “Travel Technology & Software” section of the Revfine website will provide you with valuable information and tips about travel software applications, their importance, and how they can be used to great effect.
The airline industry encompasses all businesses offering regular, paid air travel services to customers. Nevertheless, it is also an extremely diverse industry, as there are a number of different airline types and business models.
The corona virus epidemic has made a huge impact on the travel industry. Almost all governments around the world have ordered their borders to close and airlines to stop operating. This has resulted in many important local and international events, such as the world-famous travel expo, ITB Berlin and the Olympics in Japan to either get postponed or cancelled because of corona virus fears. With more and more people losing their jobs and facing financial insecurity, it’s not surprising to see a large number of business and personal trips that people had scheduled to take in 2020 or even 2021 get cancelled.
Most tour operators and travel agencies are experiencing a steep decline in revenue. The knock on effect is the result of airlines being forced to ground flights, which also affects the hotels and restaurants negatively. This means significant revenue loss for the travel, tourism, hotel, hospitality and airline industry. Some travel companies have been left with no choice but to wait it out, despite struggling to stay open.
In the category “Corona” you find a selection of tips which helps businesses operating in the hospitality and travel industry to recover and prepare for better times.
Want to Learn More About Related Industries?
The travel industry exist out of many other industries, like the hotel, hospitality and airline industry. All of these industries have in common that they are large service industries in the world and increasingly important in the modern age. In the following articles you learn more about related industries.
- Hotel Industry; An Overview of All Different Types of Accommodations
- Hospitality Industry; Everything You Need to Know About Hospitality
- Tourism Industry; Everything You Need to Know About Tourism
- What is the Difference Between the Travel and Tourism Industry?
- Travel Industry; An Overview of One of the Largest Service Industries
- Everything You Need to Know About the Cruise Industry
- Space Tourism: 5 Space Companies That Will Make You An Astronaut